May I make deductions from an exempt employee's pay for a holiday they are not yet eligible for?

No. Making a deduction from an exempt employee's salary for a holiday when the company is closed would violate the Fair Labor Standards Act (FLSA) salary basis requirement.

To qualify as exempt from the FLSA's overtime requirements, employees must have certain job duties and must be paid on a salary basis. Per the FLSA regulation 541.602, salary basis is met when "the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee's compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed."   It further states, "An employee is not paid on a salary basis if deductions from the employee's predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business." Although that regulation does not require employers to pay exempt employees for full-week closures in which no work is performed, closing for less than a week in which the exempt employees perform any work requires payment of their full salary.

Remember, the FLSA permits employers to reduce a salaried exempt employee's pay for a workweek only in the following situations:

• The employee missed one or more full days for personal reasons other than illness or accident.
• The employee was absent for one or more full days because of illness or accident, and the employer reduces the employee's salary according to a bona fide sickness/accident plan, policy or practice.
• The employee received compensation for serving in the military or on jury duty, and the employer reduces the employee's regular salary by that amount.
• The employee broke a major safety rule, and the employer reduced the employee's salary as a good-faith penalty.
• The employee received an unpaid disciplinary suspension of one or more full days imposed in good faith for infractions of workplace conduct rules.
• The employee performed no work for an entire workweek (exempt employees do not have to be paid for any workweek in which they perform no work).
• The employee did not work some days during the first or last week of employment.
• The employee took intermittent leave under the Family and Medical Leave Act.

The FLSA regulations do not specifically allow deductions for holidays. Therefore, the employer should not make deductions from an exempt employee's pay for holidays, or it would risk losing the employee's exempt status.